C ongress just passed the stimulus, or the American Recovery and Reinvestment Act this past Friday and it’s on the way to becoming law. I’ll leave editorial comments on this piece of legislation out of this post but note there are some new benefits to first-time home buyers. The US Senate included a provision offering a $15,000 tax credit to any home buyer but that was removed in the House-Senate conference on final legislative language.
Key Points of the New First Time Home Buyer Tax Credit
The recent bill has some new changes favorable to first time home buyers that weren’t included in the bill passed last year (read about HR 3221 here ). A couple of the major points included in the recent legislation are:
- $8,000 tax credit for first time home buyers or those who haven’t owned a home in the past 3 years. A tax credit means this amount is deducted from your tax liability. If that takes you into negative territory, the US Treasury will send you a check for the difference .
- The biggest difference is there is NO REPAYMENT !
- Only principal residences are included.
- This benefit is reduced for individuals with an adjusted gross income above $75,000 or $150,00 for joint filing couples.
- Purchase must be made between January 1, 2009 and December 1, 2009 (this is retroactive).
- If you sell your home within three years, the total credit must be paid back.
This isn’t cash received or available at closing but only received when you file your taxes so incorporate this into your planning. For a easy to read comparison of the previous HR 3221 program and the new tax credit, download the Modified First Time Buyer Tax Credit pdf .
Yes, Congress is trying to entice YOU to buy a home this year! Of course, we look forward to helping you with that so contact us for information on homes and condos available in the Denver area . If you act now, you may be able to get your tax credit when filing this year!
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I’ve been asked if this tax credit can be applied to your 2008 taxes for purchases made this year. According to this recent CNN article, you can claim your $8,000 credit on this years taxes if you’ve purchased a home between 1 January and tax time.
http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm